EU’s banker warns against complacency after record year

The 2016 figures are in from the part of the EU that everyone loves to love — the European Investment Bank (EIB). When they’re out of cash but need to invest, the EIB is where politicians turn to these days.

It’s the same story whether we’re talking about complicated public-private partnerships, limiting migration at its source in Africa, or paying for the Juncker Investment Plan. “The idea of doing everything with grants is over,” EIB President Werner Hoyer told Playbook.

The EIB has another great attraction in times when EU spending is treated suspiciously: it’s mostly self-financing through bond issues.

The results out today show the EIB cut checks worth €83.8 billion in 2016, supporting total investments worth €280 billion. It’s most proud of the €33 billion going to around 300,000 small or medium-sized businesses, and of €19 billion going to mitigate the effects of climate change.

Hoyer warned politicians not to use the bank as an excuse to avoid policy reform. “Recovery is still slow. 2017 must see a real stepping up of reform,” Hoyer said.

He added that the EU needed to complete the single market if it wants to boost investment beyond the bank’s lending portfolio.

Hoyer told Playbook that he expects the bank to expand in 2017 and beyond, saying it plans to provide more finance for transport, innovation building and agriculture.

“Our shareholders will not want to see their bank shrink,” as a result of Brexit, Hoyer said. The bank’s members are the EU’s national governments, meaning each would need to inject more capital to make up for the U.K.’s departure. U.K. lending by the EIB has totalled about €57.8 billion over the last decade, according to the EIB.